Results from imaging and lesion studies of item recognition memory have suggested that the hippocampus supports memory for the arbitrary associations that form the basis of episodic recollection, whereas the perirhinal cortex (PRc) supports familiarity for individual items. This view has been challenged, however, by findings showing that PRc may contribute to associative recognition, a task thought to measure relational or recollective memory. Here, using functional magnetic resonance imaging, we demonstrate that PRc activity is increased when pairs of items are processed as a single configuration or unit and that this activity predicts subsequent familiarity-based associative memory. These results explain the discrepancy in the literature by showing that novel associations can be encoded in a unitized manner, thereby allowing PRc to support associative recognition based on familiarity.